What is a Tip Out in a Restaurant?

Tip out in a restaurant is often confused with other tipping systems such as tip pooling, but tends to be a fairer method of sharing tips amongst a team.

A tip-out system involved service and front-of-house staff sharing a set percentage of their tips with supporting members of staff.

These are staff who have less customer interaction but influence the overall dining experience.

This way, support staff are also rewarded for their hard work, encouraging a collaborative work environment. 

What is The Normal Tip Out At a Restaurant? 

In the United States, tip-out practices (or tipping) are more common than not. Typically, there is a 15-20% tip-out expectation with the tips going to the staff.

But tip our practices vary from restaurant to country. Cultural etiquette and regional influences shape the expectations of tipping practices globally. 

What is a Tip Out in a Restaurant? 

A tip out in the restaurant business is what happens when service staff share their tips with members of the team who are not servers, yet are still invaluable to the customer’s dining experience.

For example, bartenders, bussers, and sometimes kitchen staff. While these roles may receive some tips of their own, it is typically significantly less than the tips received by the serving staff. 

The tip out process should not be mistaken for tip pooling. This is when all of the tips that have been earned are put together and then redistributed amongst staff.

Instead, tipping out is where serving staff gives a percentage of their tips to non-servers. This tends to be around 15-20%.

Having tip outs at a set percentage means that as the servers earn more tips, so do the non-serving staff, fairly reflecting the teamwork of the restaurant service. 

Though not all restaurants use a tip out system, there are several positives to implementing such a system.

For starters, tip outs encourage a team of staff to work cohesively and effectively together to better the customer’s dining experience (and increase tips).

It is also a way of recognizing the non-serving staff who do not have direct customer interactions but influence the restaurant experience as a whole.

A tip out system can also be a fair way of balancing out income amongst staff, giving every member of the team fair compensation for their work. 

How Much is 20% Tip Out?

20% tip out refers to 20% of a restaurant server’s overall earned tips, which is then distributed amongst non-serving staff. If a server earns $100 in tips in one night, then 20% tip out of that would be $20.

This 20% distribution is used as a way to contribute to a more equal composition of behind-the-scenes staff for their share of work. 

The other 80% of tips, the server gets to keep for themselves. In the United States, this makes up the vast majority of a server’s earnings, while non-serving staff tend to be on more consistent pay. 

How Do Tips Work in a Restaurant?

On top of the final bill of the meal, tips are the extra payment that a customer leaves that reflects how satisfying the service of the meal was. 

Like tip outs, tipping expectations in a restaurant are influenced by the local culture and clientele of the restaurant.

However, most tips are usually calculated on a percentage based on the final bill. That percentage tends to be around 15-20% but the percentage does vary. 

It is mainly the servers that receive the tips that are left. Though tip out systems are tip pooling means that any tips are shared amongst all members of the restaurant staff more fairly. 

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Frequently Asked Questions

Final Thoughts 

The whole purpose of tip out in a restaurant business is to ensure that every member of staff is being fairly paid for the work that they put into providing the best experience possible for the customer.

It is a way to encourage teamwork and to keep the team happy and collaborative.